Taipower may cut summer rates

OFF-PEAK HOURS The state-run firm has two separate proposals designed to ease the financial burden on consumers as electricity consumption skyrockets in the summer heat

By Annabel Lue / STAFF REPORTER

The state-run Taiwan Power Co (Taipower, 台電) is proposing an adjustment of its summer electricity prices for household users after consumer groups expressed anger over what they called unreasonable electricity rates during summer off-peak hours.

"We have formulated a plan and will send it to the Ministry of Economic Affairs for approval today," said Lee Chuan-lai (李傳來), a Taipower communications official.

The proposal will go to the ministry's Commission of National Corporations for initial review and then wait for the ministry's final approval, Lee said.

Taipower's rate-cut plan is composed of two options.

The first is that Taipower may charge summer electricity prices in accordance with different time-slots to help lower the financial burden on consumers.

For most households, electricity use is necessary and relatively steady at night, therefore Taipower may ask for lower power prices for consumers who consume electricity during off-peak hours (between 10pm and 7am) while charging higher utility prices for electricity usage during peak hours (between 10am and 5pm), Lee said.

One drawback is that household users need to ask Taipower to install a new electricity meter in each house. The meters cost NT$6,000 each, however, and may create extra financial burdens for Taipower if the company decides assume the cost of the meter by itself, according to local media reports.

Consumers are wary that Taipower would pass the increase on to its customers, unless it can offset the financial burden with cost reductions elsewhere. Lee declined to comment on these concerns, saying that the company will discuss the issue with ministry officials.

The second option to provide savings that Taipower proposes is to charge higher rates for households consuming over 500 kilowatt-hours per month, while asking consumers to pay lower prices if they only consume electricity between 110 kilowatt-hours and 500 kilowatt-hours per month, Lee said.

Under current pricing, consumers that use less than 110 kilowatt-hours per month are charged NT$2.2 per kilowatt hour.

Those using between 110 kilowatt-hours and 330 kilowatt-hours per month are charged NT$2.7 per kilowatt-hour. Any usage higher than 330 kilowatt-hours per month will be charged at NT$3.3 per kilowatt-hour, Lee added.

Since 1989, Taipower began increasing rates by a range between 10 percent and 27 percent every summer -- depending on how much a user consumes each month.

The rate hike for peak hours usually starts June 1 and ends Sept. 30.

Late last month, the Consumers' Foundation (消基會) held a public hearing urging the state-run power company to cut summer electricity prices for households.